Rearview BI misleads business strategy

Businesses are quickly joining the big data revolution. The outcome is a collection of massive efforts to collect and condition enterprise data that represents the last month, the previous quarter, or past years. Then, they crunch the big data into a digestible view that makes some predictions about the future. We now know this practice can be riddled with the perils of misguided analysis. We can quickly demonstrate this observation by asking a simple question: Is our enterprise, with our complex processes and business rules simply a product of the past? If the answer is yes: Congratulations—rear-facing analysis can help you continue to reproduce the past.

What if we’re not striving to reproduce the past? Instead, we need progressive strategies, agile operations, and responsive tactics to achieve future business objectives while staying ahead of upcoming adversities. We’d like to be prepared for events that we cannot control by having evaluated the effects of these challenges and developed mitigation plans. We have a good understanding of the effects that today’s and tomorrow’s decisions will have on future outcomes. Risks and uncertainties are bounded and well-defined. We require integrated predictive solutions that capture elaborate inputs and translates them into accurate, detailed views of future metrics over time.

Rear-facing BI cannot produce a useful business strategy for most of today’s enterprises. At best, these predictions—powered by history—result in reactionary tactics. We can quickly evaluate what-just-happened and hope to comprise and implement a rapid reaction. If we can get this to work, we’ll be firmly chasing the recent past and will inevitably be blindsided by unforeseen future events and conditions. We hope to recover quickly because we’ve become really good at reacting to emergencies and operating in crisis mode.

We can make things even worse by using rear-facing BI not only for rapid crisis reaction tactics, but to develop our business strategy. We’ll take a look back, analyze history, then we’ll make decisions that lock us into that historical view for quarters or years. The aftermath may be unrecoverable.

Rear-facing BI cannot put together innovative operations and cannot accurately shape the vision required to get ahead of competition and fluctuating market environments. Many elements and uncertainties about the future are not represented in historical data. These details will be absent from our rear-facing BI. Some practitioners of this flawed approach are stringing together reactionary tactics and calling it strategy—Speeding ahead while looking in the rearview mirror, destined to miss critical turns and obstacles.

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About Serg Posadas

Serg is VP of Industry Solutions at Clockwork Solutions. A published author and frequent speaker at conferences, Serg has over 20 years of experience in applied advanced predictive analytics deployments in industry and Department of Defense environments.

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We are passionate about applying advanced analytics to meet real-world business problems.

Established more than 30 years ago, Clockwork built on the simplicity and accuracy of the modeling and simulation methods pioneered during the Manhattan Project. The result is an advanced analytics platform designed specifically for enterprises and defense organizations. Our modeling, predictive analytics, and Discrete Event Simulation technologies help you manage your capital-intensive, strategic assets delivering deliver high-fidelity insights to improving asset performance and reducing costs.